7 minute read 13 Feb 2023
Electric cars charging at charging station

How proactive charging strategy drives EV transition success

By Violetka Dirlea

EY-Parthenon Principal, Strategy and Transactions, Ernst & Young LLP

Co-creating and delivering innovative solutions to enable our clients to envision and capture new strategic opportunities.

7 minute read 13 Feb 2023

Every company with a commercial fleet will need to develop its own EV charging strategy and contingencies.

In brief

  • Companies will need contingency and emergency plans for charging EVs.
  • Selection of charging locations affect the number and deployment of chargers.
  • A data-driven approach is key.

Thanks to Alok Patil, Manager, eMobility and Zhehao Jin, EY-Parthenon Consultant, Strategy and Transactions for their contributions to this article.

Commercial fleets across the private and public sectors are transitioning from internal combustion engines (ICE) to battery and/or fuel cell electric vehicles (EVs). It is not a question of if, but when the transition will be complete. The end date and interim milestones depend highly not only on “fit for purpose” EVs being available, but even more on easily accessible and sufficient charger availability, within and outside of the perimeters of the business.

While the US government and states are launching ambitious plans to accelerate the installation of public charging,  that charging will not satisfy the needs of commercial fleets.

The charging infrastructure required to meet future demand is massive and must be designed for a diverse set of customers, from personal, commercial to transit, school buses and government fleets.
Marc Coltelli
EY Americas eMobility Energy Leader

Every company with a commercial fleet will need to develop its own EV fleet charging strategy and contingencies — first, to cover independently internal needs and then to collaborate with other partners or leverage public charging opportunistically. Finally, every company will need an in-depth risk evaluation, risk mitigation and emergency plan to charge vehicles when the grid may be down. 

Charging availability can make or break EV fleet operations

Surveying vehicle operators reveals that their biggest anxiety operating an EV is the scarcity or lack of charging availability. As an example, in a 2022 EY-conducted survey of more than 200 National Grid fleet drivers, the top three concerns focused on charging rather than EV capability or suitability. Indicating that a successful transition strategy needs to address the charging plan.

Figure 1: Operator concerns related to electric vehicles

EV charging plan polling graphs - Figure 1
  • Chart description

    Bar graph shows the biggest concerns for fleet operators when operating an EV. The top three concerns for them focuses on the scarcity or lack of charging availability.

(Chapter breaker)
1

Chapter 1

A major departure

EV charging is a big change from current fueling behavior.

In most ICE fleets, fueling takes place at public locations (gas stations) or fuel depots. With an EV fleet, charging options can change drastically. This is especially true if the fleet has multiple uses and variable routes. ICE fueling by nature is as-needed or opportunistic. EV charging can be cheapest and most effective when it’s done regularly and in a planned manner.

Figure 2: Comparison between preferred fueling and preferred charging locations

EV charging plan polling graphs - Figure 2
  • Chart description

    Pie graphs show a comparison of the preferred fueling and charging stations for vehicles. ICE fleets can only fuel up in depots and public stations while EV fleets will have additional options to charge at home or in other strategic locations.

(Chapter breaker)
2

Chapter 2

EV Charging strategy

Outlining what, where and when EV charging must be made available.

Therese Sullivan, Director, Operations Support, National Grid, says, “A charging strategy starts with an understanding of all potential future charging locations, including on-site, mobile, fast-charging hubs, home and public. Planning a charging location requires a detailed understanding of internal factors such as fleet operational patterns and preferences as well as external factors such as availability of public charging in the market.”

Each potential charging location requires well-defined supporting policies, business processes, technologies and systems. For example, to charge at public locations companies will need a simple and easy way of defining payment and reimbursement processes for operators. For home charging, companies will need to have a well-defined home policy for charger installation, service and reimbursement of electricity costs. These solutions require evaluation of various alternatives and implications (free chargers vs. employees pay for charger and installation, what and how the reimbursement will be done, supporting technology, etc.).

Furthermore, a successful strategy, and especially its implementation, requires additional enablers, such as an operating model, organizational design, revised governance and key performance indicators (KPIs), and a change management plan.

Figure 3: Overview of strategy elements

EV charging plan polling graphs - Figure 3
  • Chart description

    A table listing the strategy components and strategy and organizational enablers for different types of EV charging locations.

The selection of a charging location influences overall charger numbers and charger levels needed to be installed. For example, enabling home charging may reduce the need for on-site charging and could lower on-site charging load. Similarly, enabling public charging can reduce the need for fast-charging hubs drastically if operational needs allow it.

The common practice is to plan chargers based on a rule of thumb. Ratios such as one charger port per vehicle and one DC fast-charging port per 25 vehicles are commonly cited without much analysis.

A charging strategy starts with understanding all potential charging locations. Planning for a location requires an understanding of internal and external factors like fleet operational patterns and public charging availability.
Therese Sullivan
Director, Operations Support, National Grid

An EY survey of 29 commercial fleets from six different industries conducted in early 2022 shows a ratio of less than one charger per port could be operationally sufficient. Similarly, a higher vehicle to DC fast-charging ratio could be desirable for fleets with high reliability requirements. Several scenarios with different combinations of charging locations to calculate charger level and numbers by location can be evaluated.

EV charging infrastructure stakeholders are best positioned to build a business case and provide valuable information on projections of peak EV charging demand management challenges, revenue opportunities, and costs.
Marc Coltelli
EY Americas eMobility Energy Leader
(Chapter breaker)
3

Chapter 3

Modeling outputs

For clarity and stakeholder consensus, modeling outputs should be simple and easy to visualize.

Figure 4: Modeling charger type and location (illustrative)

EV charging plan polling graphs - Figure 4
  • Chart description

    A bar graph showing the mix and number of charger types that can be made available per location type, for sampling purposes only.

Common charging planning pitfalls to be avoided

  • One-off installations

    Most commercial fleets start their electrification journey with a fleet suitability assessment. Fleet suitability then leads to a vehicle replacement strategy. This process leads to one-off charger installations. Long term, this approach increases costs by causing multiple site disruptions and permitting. Planning long term avoids these shortcomings.

  • Reliance on public charging

    Commercial fleets have a high reliability requirement. They also perform emergency or storm duties. In such situations, relying heavily on public charging infrastructure can be a mistake.

  • Lack of change management

    Fleet operator experience, especially in the early phase, can make or break an EV transition. As discussed before, EV transition requires changes to operations and driver behavior. A detailed change management plan is critical to success. An ideal change management plan should include training and communication components. It should also provide vehicle operators a proper forum to ask questions and provide feedback.

  • A flexible and data-driven approach to planning is key

    As commercial fleets scale their EV transition, a data-driven approach is key. An implementation process outline would provide opportunities to continually assess and incorporate user feedback and charger usage data. Using this process, re-evaluating planning assumptions would be done annually.

  • Successful planning and execution require collaboration and governance

    “A successful charging strategy needs inputs and collaboration from multiple stakeholders within the company. It is critical that these stakeholders are aligned around common objectives, clearly defined roles and responsibilities, and a set of metrics that drive the right behaviors,” says Sullivan.

(Chapter breaker)
4

Chapter 4

Stakeholders and planning

Metrics need to be considered for collaboration and intervention into planning and implementation.

Figure 5: Key stakeholders

EV charging plan polling graphs - Figure 5
  • Chart description

    A graphic showing the stakeholders that should contribute in planning an EV charging strategy namely, fleet operators, fleet asset management, facilities, real estate, procurement, and financing and reporting.

Stakeholders and their inputs

Organization

     Inputs

Fleet operators

  • Vehicle usage profiles
  • Key operational locations

Fleet asset management

  • Vehicle replacement plan
  • EV specs

Facilities

  • Charger locations and parking availability
  • Electric service and existing load
  • Capital improvement plan
  • Employee charging needs

Real estate

  • Permitting and interconnection needs
  • Lease information
  • Potential historical and environmental impacts

Procurement

  • Lead times
  • Vendor capabilities

Finance and reporting

  • Budget
  • Metrics and KPIs

The organizational design may need to be re-evaluated to help ensure that the new roles that will be required for ongoing strategy re-evaluation and implementation are put in place. For example, new roles that may need to be defined to strengthen strategy, implementation and execution include change management specialists, site planning/project management specialists, systems and reporting analysts, and charger and maintenance technicians.

A successful charging strategy needs inputs and collaboration from multiple stakeholders within the company.
Therese Sullivan
Director, Operations Support, National Grid

Risk identification and mitigation planning need to start early

A full-scale charging strategy is new to most organizations. At each step, there are risks that span from technology, lack of electric capacity at sites and long interconnection times to a lack of trained installers. Identifying key challenges and having a mitigation plan can help avoid delays and cost overages.

Select risks and mitigation strategies

Ongoing charger performance can be evaluated to help ensure that near real-time or real-time information is collected and acted on to drive performance optimization and immediate intervention if maintenance and repair are needed.

Summary

With new regulations, charger supply challenges, evolving EV charging strategies and talent shortages, multiple risks are emerging and charging planning needs to remain flexible, yet disciplined and data-driven. Fleet, operations, facilities and procurement must continuously collaborate to stay abreast of new developments, respond thoughtfully and implement changes rapidly. Real-time monitoring can help ensure timely actions are taken.

About this article

By Violetka Dirlea

EY-Parthenon Principal, Strategy and Transactions, Ernst & Young LLP

Co-creating and delivering innovative solutions to enable our clients to envision and capture new strategic opportunities.